Workers Nervous About Houston Pension Fund

HOUSTON (CN) – City employees sued Houston, claiming the city is withholding records they need to determine how much money Houston must pay into workers’ pension fund – and whether it’s doing it. The Houston Municipal Employees Pension System sued the city, Mayor Annise Parker and other city entities on June 18 in Harris County Court. Facing the same kind of obligations that bankrupted Detroit in 2013, Houston admits it has a “ pension funding crisis ” due to the more than $300 million a year it contributes to three pension funds, for city police, firefighters and municipal workers. The city is required by state law to contribute money to the pension funds each year, based on the number of employees covered. The pension fund also sued Houston First Corporation, which the city created in 2011 to manage its entertainment venues and convention center. After the pension fund board voted to include Houston First employees in the fund, the city sued to challenge it. The Texas Supreme Court sided with the pension board. Despite that ruling, the pension fund says, when it asked the city for information about each Houston First employee, to ensure that the city is providing proper benefits and contributions for them, the city balked. “HMEPS [the pension fund] received a letter from the city attorney Donna L. Edmundson, dated May 6, 2015, stating the city ‘may disagree about the scope of the recent opinion from the Texas Supreme Court’ and that, regardless, it could meet until mid-June 2015 to discuss the issue and HMEP’s request for information,” the complaint states. With the city’s budget due by June 30 for the coming fiscal year, the pension fund says it had no choice but to sue the city for the data. It seeks writ of mandamus and a temporary restraining order forcing the city to produce the data. It is represented by Travis Sales with Baker Botts of Houston. Though the lawsuit portrays the city as playing possum with the data request, city officials say they have tried to work with the fund’s administrators. “The City reached out to HMEPS several times to seek a meeting. It is not known why they did not respond and, instead, filed the lawsuit,” Mayor Parker’s spokeswoman Janice Evans said in an email. Evans said she can’t guess at how much the city will contribute to the fund in the fiscal year that starts on July 1. “The litigation will ultimately decide who the covered employees are. Until then, we are unable to estimate contributions,” Evans said. The city cut a deal with the firefighters’ pension fund in March that will save it $80 million over the next three years, though critics say the agreement just delays the payments and doesn’t solve the underlying funding crisis. But the deal saves three-term Mayor Parker some budget headaches that will be passed on to her successor, who will be elected in November.